Insurance is the certain loss of a small sum in exchange for the compensation of a potential much greater loss.
Insurance companies often use statistical analysis to determine risk and overall potential exposure. They spread the risk amongst many individuals through selling them policies of a similar nature and add to their statistical estimates of such losses occurring - a premium - which results in profit for them and reserves from which to pay the claims that do arise.
Many risks in life cannot be insured against as they are too rare and/or too dangerous. For a trade often such is protected against by use of stop losses.
Someone who is trading futures needs to make a full statistical study of the risks involved in the type of trading being done or the specific trading strategy or style.
When someone does not know how to competently do something he is likely to become afraid of it or risk averse.
When a trader doesn't have adequate experience or statistical evidence as to probable risk, he is taking quite a chance. Someone who has this information however may be able to execute trades which otherwise look quite risky to someone not so educated.
